Kalshi Halts US Election Trading As Court Grants CFTC’s Request

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As a seasoned analyst with years of experience navigating the complex world of financial markets and regulations, I find the recent developments between the CFTC and Kalshi intriguing. The swift back-and-forth between the two entities underscores the dynamic nature of regulatory compliance in the rapidly evolving crypto space.

The U.S. Commodity Futures Trading Commission (CFTC) has temporarily halted trading on Kalshi’s prediction market regarding the U.S. election. This move came just under 24 hours after trading began, following an administrative hold on the initial order in the CFTC’s case against Kalshi. As cryptocurrency enthusiasts closely watch the U.S. presidential elections, analysts predict that the outcome could have a substantial influence on Bitcoin and other digital currencies.

CFTC Secures Court Win In Case Against Kalshi

The Commodity Futures Trading Commission (CFTC) scored a court victory against Kalshi, as the appeals court decided to temporarily halt the district court’s ruling in favor of Kalshi, while they review the CFTC’s request to delay the decision during the appeal process. Earlier, District Judge Jia Cobb had sided with Kalshi, stating that the regulatory body overstepped its authority by stopping the predictions market from listing bets on elections.

After receiving the court ruling, the Commodity Futures Trading Commission (CFTC) requested Judge Cobb to halt Kalshi from launching their election trading platform until she released her complete decision. This was intended to aid the Commission in determining whether to file an appeal. However, Judge Cobb declined this request. As a result, the regulatory body filed an urgent motion at the Court of Appeals to temporarily halt the initial order because Kalshi had already launched their election markets.

The Court of Appeal’s decision to temporarily halt Judge Cobb’s order caused Kalshi to stop its trading market within 24 hours of its launch. This wasn’t a ruling on the merits of the motion, but rather, the court requested Kalshi to respond to an emergency motion so they could consider whether the order should remain paused until the appeal is finalized.

In their response to the court’s emergency motion, as stated in a letter penned by Kalshi, they clearly indicated their readiness to act promptly should the administrative stay be approved. This preparedness was to guarantee that the court would render its decision no later than September 16 or at the earliest possible opportunity.

The Significance Of These Prediction Markets

The case brought forward by the Commodity Futures Trading Commission (CFTC) against Kalshi is notable because prediction markets have grown in importance within the crypto community prior to the upcoming US elections in November. Crypto enthusiasts often rely on the opinions of bettors to predict which candidate will win at the polls, with options ranging from Donald Trump and Kamala Harris. Cryptocurrency has also emerged as a significant issue leading up to the elections, with Trump expressing his backing for Bitcoin, while Harris has yet to clarify her stance.

Analysts have been forecasting Bitcoin prices depending on who becomes the next U.S. President. Bernstein analysts foresee a possible Bitcoin price surge to around $90,000 should Trump win the election, but if Harris takes office, they predict that BTC could potentially drop to roughly $30,000.

According to recent Polymarket data, there’s about a 50-50 split between Harris and Trump, with each having roughly a 50% chance of being elected as the next U.S. President.

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2024-09-13 10:38